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Mad Money

News/Business. (2013)

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Cramer 15, Apple 11, Jim 8, Us 6, Stern Ag 5, Ge 5, Ted 4, Smith 4, Lazard 4, China 4, America 4, New York 3, Texas 3, Warren Buffett 3, Clorox 3, Maxwell 3, Toyota 3, Morgan Stanley 2, Europe 2, Costco 2,
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  CNBC    Mad Money    News/Business.  (2013)  

    May 15, 2013
    11:00 - 12:01am EDT  

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nothing can reverse copd. spiriva helps me breathe better. does breathing with copd weigh you down? don't wait to ask your doctor about spiriva. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer! welcome to "mad money." welcome to cramerica. other people want to make friends, just trying to make you a little money. my job is not just to entertain but to coach you and teach you. call me at 1-800-743-cnbc. you saw tale of two cities today. a day where it was the best of times for google. the stock roaring $29 and it was
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the worst of times for apple, with the stock plunging $19 to $429. and while the dow climbed, the s&p gained one, and it has nack day edged up 0.26%, the fortune of these two cities capture the imagination of everyone who focused on the stock market today. i know, i know what you want. you want answers about this dwern divergence. you came to the right place. first, this tale is not a new one in 2013. google is up 29% for the year. apple is down 19%. so we shouldn't just say, hey, wow, what happened there today? this spread has gotten wider and wider as the year's gone on. second, we know that google is red hot. barely a day goes by where we don't have some analyst yapping making a bold call about where google's headed. thank heavens he didn't join the crowd predicting that google is going to $1,000. almost every time we get one of these 1g price target thingies, we end up having a quick sell-off.
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it's like clockwork. $1,000, sell, sell, sell. at the same time, wall street's been pretty silent about apple, ever since that widely panned quarter when so many analysts cut their price targets for the darn thing. the stock bottomed on all that bad news, perhaps saved by a decent yield of 3%, kind of like kimberly clark and clorox. that was probably half because the company boosted the dividend and half because the share price had almost been cut in half. from there, apple roared 80 points before collapsing back to $429 today. if you look at the chart of that move, it does have the feel of what wall street calls a dead cat bounce. something i know can cause a bit of a lift, given that i saw my cat, comag, get hit by an 18-wheeler and the poor soul did have a bit of a lift after the fatal point of impact. of course, apple's a much better opportunity for comeback than comag did, but that's what you get when you name your cat after a disk drive component on the 52-week low list at the time of
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the accident. and we know that apple fell below its 50-day moving average. something i point out, because when we go off the charts on tuesdays, we hear about traders blow out of a stock. so we've got to throw that in the mix too. but you know what this is really about? it's what it's always about. it's about the earnings, the future earnings. how to value them, how to place a price tag on them. right now google's got a core business that is hitting on 12 cylinders, like that beamer 760! especially the search business. and a promising advertising exchange business that's taking the internet world by storm. we call this thing programmatic and google runs it. plus, there's the operating system for the best-selling smartphone in the world, the android by samsung, and it hasn't even begun to exploit it much for cash. you know that's going to happen. finally, google looks like it's finally getting around to monetizing youtube, which morgan stanley reported today will be the next $20 billion in revenue
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business. who's got some business buried within their organization that's suddenly worth $20 billion? that's incredible. when i read it, i said, wow, $20 billion burieied within that company. morgan stanley making it sound like youtube is the next abc, nbc, cbs, fox, and time warner all combined. with massive market penetration and much love from both viewers and advertisers. i will go one step further. unlike apple, microsoft or yahoo! google does not need to buy netflix to grow faster, it's growing faster than netflix. which brings me to the real issue, valuation. with google, you're getting everything from google glasses to android, the new youtube monetization, some will pan out, and some could pan out big-time, which means that the company's earnings and revenues could be accelerating. so what does apple have next? what does apple have to compare with google? what have they got? what's going on at apple that
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could move the needle? not sure. don't know. can't say. beats me. one thing we do know, though, is that apple keeps missing earnings estimates, falling far short of them. wall street presumes that apple is going to miss the next quarter too. because unlike google, there are no new initiatives that could help apple beat or meet the estimates. there's a growing consensus that apple's earnings might be lower next year than this year. very different from google, which might grow earnings at 18% next year, as earnings shrinkage is something i really expect to happen only with coal and iron ore companies. i mean, somehow you don't want to be in that cohort. of course, apple does pay a hefty dividend, so there could be a $3.50 floor down, but a dividend in a stock like apple is a double-edged sword. someone thought that i thought that google should pay a dividend. i said, goodness, no. i want google to pay every dime it has into all of these fabulous opportunities so it can grow them and accelerate revenue
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growth from here. you want a dividend when the growth is played out. you want to keep the money in the business when the growth is right in front of you. for google, the business is low-hanging fruit to be harvested. for apple, the tree seems to be barren. how do you value them? first with google. i think what you do, you have to look at what we call the compares. right now google trades at around 20 times earnings. 20 times let's say next year's lowball estimates, even as i expect 18% growth. that's really cheap. who else trades at the 20 times earnings? who else has valued the same earnings in the future. how about clorox, 4% growth rate. in other words, company's with a third of google's growth rate sell at a third of price. and while these companies have a dividend and have consistent earnings growth, you want the super oxygenated growth of google.
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and if you use the same yardstick, you'd be willing to pay substantially more for this stock. how much more? i'm not going to give you what that is, it's too insane. we know we should be willing to pay a price to earnings multiple that's up to twice the size of a company's rapidly expanding growth rate. but that means you get a stock that should be at $1600. that's too crazy too. but isn't it equally crazy that google sells at the same price to earnings multiple as clorox, when google is growing 4 1/2 times faster. that's a head scratcher, isn't it? we could look at plenty of other 18% growth. in each case, we get a price to earnings multiple that's at least 1.25 times the growth rate. i've got to be rigorous on this thing. if you use that growth rate, you get google at $1,000, which is why the analysts keep gravitating to that level. makes sense. suffice it to say that google is very good on its growth and deserves to grow higher. especially if that growth rate is accelerating. it's not that i think that apple should be lower. i'm not making that case to the
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seller. my charitable trust owns it. it's almost impossible to judge what price to earnings multiple a company with declining and inconsistent earnings should trade at. i just have never been able to do that, all my years in the business. we just can't be sure. google gets the benefit of the doubt, because its growth is terrific. apple doesn't get any benefit of the doubt until it's protected by its yield, which could be 50 points from here. what could change that divergence? well, what gets apple to turn around? or google to turn down? anything that shows apple can beat the estimates or anything that suggests google will fall short. right now, we don't have either. so here's the bottom line. the tale of two cities is, indeed playing out, just like that amazing stock picker charles dickens predicted. it is the season of light for google and the season of darkness for apple. the spring of hope for owners of gog and the winter of despair for winners of aapl. and until we are otherwise, i expect apple to fall short of estimates and google to, alas,
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indeed beat the great expectations. and the business of stocks, just like in literature, it's all about the classics, which says that google at $915 is cheaper than apple at $429. let's go to ed in texas, please. ed? >> caller: hey, jim. my question today is on yrcw. with the stock with little to know move over the last few months, years. is this one here to stay? >> yeah, this one exploded. this one really exploded. you know, i've got to tell you, the truckers are very hot, but this one is too stizzling for m the momentum is unbelievable here, and if you wanted to take a shot at it, i get that, but i can't handle it. it's too hot for me. chris in new york? >> caller: jim, i know you used to be very bullish on toyota a couple of years ago. >> yeah, i was, i was.
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>> caller: how about now? they seem to be ramping back up there? >> i said this morning -- look, i think toyota is for real because the japanese got serious. the japanese are devaluing themselves daily. it makes it so that toyota is going to be cheaper than all the other cars and that makes sense why the stock goes up. i think it can go higher still. always was a great car company, now it's got a competitive advantage. it's a tale of two cities for tech titans, apple and google. google, it's the best of times. apple, not so lucky. "mad money" will be right back. coming up, money-make mistake? markets at are all-time highs, company coffers are overflowing. but cramer spotted one mistake that could prove costly for some. find out what and how to profit from it. and later, bright future? there's a revolution going on in your home and one company is taking share of a new market. you may not see it, so tonight cramer's shedding some light on a stock that could that could be ready to shine. stick around for an enlightening
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idea. plus, shipwreck? it's been a volatile voyage for shares of nordic american tanker. tonight, cramer checks in with the company's captain to find out if you can right the ship and shore up the stock. all coming up on "mad money." [ male announcer ] the day building a play set begins with a surprise twinge of back pain... and a choice. take up to 4 advil in a day or 2 aleve for all day relief. [ male announcer ] that's handy. ♪
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thereby should have been more m&a. that's right. during this whole run-up, there should have been many more deals, more acquisitions to spur growth or take market share. now, look, we can sit here and wonder why the heck there's been such a dearth of activity since february. we can reach a very logical and even inescapable conclusion. most ceos were just too darn
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afraid, too pessimistic, how about this, too stupid to take the opportunity to do any buying. now i've got some real bad news for those guys, bad news! the time for transformative deals has probably passed. unless we get some meaningful pullback. harsh judgment? severe decree? i don't think so. we spend a heck of a lot of time, much more than we should, fretting about why stocks shouldn't go higher. think about all those admonitions we've heard, ben bernanke is about to change his mind and pull the rug out from under the market, tax rates are going higher, don't pay up, the sequester's coming, don't you dare pay up. fiscal cliff's here, don't pay up! europe's burning, china's faltering! valuations are stretched, commodity prices are falling! all reasons not to pay up. i mean, the fact that of i've sat here and listened to these various different objections at every single milestone is a pathetic reminder if not a parody of just how wrong people could be. it's an incredible thing, isn't
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it, that a good manager like dave tepper can come on "squawk box," as he did yesterday, and make news, actual news, by just simply being unequivocably bullish in the greatest market i've ever seen. however, most chief executives didn't see it that way. and they still don't. so instead of looking for bargains where prices were lower, they sat on their hands or maybe they bought back some stock, teeny-weeny little bits, instead of the cheap and ultimately additive stocks of others that they could have purchased when they had a chance. most, but not everyone. not everyone sat on their hands. so let's think about it. who actually took action? what kind of people? wide-eyed guys, crazy people? i don't know, let's think of these guys. think of the people who stepped up to the plate in this period. first, there's the totally and correctly beloved warren buffett, who bought heinz three months ago for the same price he would probably have to pay for it today, except he got the whole company. yeah, takeover premium and all. that's right. buffett stole heinz in
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retrospect given how high hershey and the like have traded. and how about john malone, at the bottom, he only spent $25 million to by virtual media. when going global finally gets cheap, what happens? only malone steps up. this guy is flat-out brilliant. everything faber says about him is true. he's not afraid to make a mistake. i wonder what he would have had to pay for it had he waited until now to start bidding. how about sandy cutler? you're familiar with him, right? cutler knew we could be in for a period of low growth, maybe sustained, so he buys a competitor, at least when the anti-trust department is pro-trust, at least pro-trust with the ceo's about to make money. they will make 21/2 times more money than cooper and eaton would have separately, okay? then there's jeffrey sprecher. the ceo of intercontinental
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exchange. ask anyone in the united states about the new york stock exchange, and they'll say, pinnacle continental, and ask them about intercontinental, they'll say nice hotel. but he decided to buy the intercontinent with exchange and now he'll be running the largest exchange in the world, ice. or take rich kinder at kinder morgan. he bought out two companies during this period. he paid about $24 billion to get both. probably have to pay $40 billion now. i don't know. they were immediately additive to earnings. he can raise his distribution mightily, simply because he made these acquisitions. that's perfection, people. booth line, warren buffett, john malone, jeffrey sprecher, rich kinder, they weren't afraid, they were bold. the rest of the ceos, the door is now closing and all i can say is, once again, the smartest guys acted. the others, they sat on their hands when things were cheap and worried about everything instead of being courageous and aggressive and actually doing something to change the fortunes
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of their companies permanently for the better! stay with cramer. coming up, bright future? there's a revolution going on in your home and one company is taking share of a new market. you may not see it, so tonight cramer is shedding some light on a stock that could be ready to shine. stick around for an enlightening idea. oh, he's a fighter alright. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick...
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time to address one of the most controversial stocks, a cross fire stock, a battlefield stock, in this market. i'm talking about cree, the l.e.d. lighting play that has been infuego over the last few years, rocking 78% higher just since the beginning of 2013. yesterday we had a pair of dueling analyst reports about cree. the guy who is cover the stock came out and downgraded from buy to neutral, cutting the price target from 66 to 59, roughly a buck below where the stock's trading right now. doesn't that just say sell, sell, sell? at the same time, literally one minute later, lazard, which already has cree rated as a buy comes out with a piece of o research where they raise their estimates and dramatically boost their price target, from 62 up
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to 73. it's literally this! >> all aboard! >> now, regular viewers know that we love these analyst showdowns here on "mad money," especially when they're fighting over an ubercontroversial stock like cree, that has a lot of fervent bullish backers as well as equally ardent bears and short sellers. you get a chance to question the arguments between both sides. i used to play that music. you can make the most informed decision possible about where a stock is headed. we like the process of figuring out stocks. so that you can like it too. before we get to the face-off, we're going to try to figure out which analyst is right, you should be aware, because i like to play with an open hand, even one that is six clubs high, i've got a history with this stock. way back in august of 2010, i recommended cree as a play on a shift away from the old-fashioned lightbulbs toward towards light-emitting diodes or
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l.e.d.-based lights that are way more energy efficient. i mean, you can leave them on for weeks, it seems like. i never turn off the one next to my bed, but then i never go to sleep, and these things can last for decades. at the time, cee was a major supplier of the l.e.d. chips that are using major displays, like your computer screen and smartphone. now, i thought the l.e.d. business would take off and the stock would roar, talk about being early! no, i was wrong! not early! it dropped like a rock. falling from $70 where i got behind it down to $52 in six weeks. faster than a tesla going to 98 or whenever it's going these days. ion you know what i did? i put the post-it note on my head and apologized to you for ever recommending the darn stock and told you i was dead wrong and it isn't a good stock to own. get rid of it. well, i was right, at least. i got something right. after that, cee get kepting crushed and bottomed to $20 and
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change. so i've been burnt to a crisp before like a s'mores. however, the cree of today is very different than the cree of 2 1/2 years ago. these days, cree is much less levered or geared towards the display backlighting business which crushed the stock after i recommended it wrongly in 2010. and the company is a lot more exposured to general lighting, like the lightbulbs for the lamps in your house, where l.e.d.-based lights have become increasingly popular. i feel like i'm the shamwow guy here. wow, yeah, the chap slop, or whatever that thing is. when i originally recommended this -- and they're indestructible! when i originally recommended -- when i originally recommended the stock and got annihilated, cree didn't actually sell lights, they just made l.e.d. kpoepts for those lights, but in august of 2011, they bought this company is this business now
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accounts for 37% of this company's sales. in other words, cree is a vertically integrated l.e.d. lighting play and that makes that stock a lot more attractive. second big changes, l.e.d. lighting is much bigger these days than it was three years ago, as l.e.d.s have rapidly taken market share in the lighting business. and you see them on the shelves of every hardware store, discount store, and chain in the land. the stock has also had an epic run. so can it go higher or it due for a pullback? hence the need for the analyst face-off. these two forms of research seem so contradictory, i find it perpl perplexing. they see very strong demand for l.e.d. bulbs. their checks were more positive than what the company itself saying. pretty amazing. but stern ag downgrades the
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stocks because of the channel checks. they suggest that cree's lightbulb business could be in serious danger of getting squeezed out from the competition, from phillips. holey cow, that's a behemoth. we don't want that thing coming d down on us. so not only do these two disagree about stock, but it seems like they're working on two completely different sets of facts. the bear case is pretty simply. they talk to lighting distributes all over the country. and what they've heard is that phillips north american lighting business is forcing distributors to choose. choose between their products and cree's. the analysts think that roughly half have distributed cee's and phillips and they believe those distributors will stick with phillips if they're forced to choose. they think this could put 15 to 20% of cree's total sales at risk. that's a lot, during the current
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quarter and the next one. that means estimates are way too high. what about lazard. their checks were with home depot, but the key is that cree sells to home depot directly. they don't use any intermediaries. stern ag did something different. they checked with lighting agents who account for the other two-thirds to four-fifths of cree's lightbulb sales. so phillips could be squeezing cree out with those agents, but you'd never know it if you only spoke to home depot. that's the flaw. two different methodologies, two different results. that said, let's give lazard some good points here. it's actually about cree's new 40, 50 watt equivalent l.e.d. bulls, $10 without hurting the company's gross margins. these new products were nearly sold out at many stores, in part because they actually look like an old-fashioned lightbulb and not a prop from a low-budget
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science fiction movie! so who's right? i think it's important to note that even when stern ag says they're worried about the next couple of quarters, they also take great pains to stress that negative impact will be short-term and they still believe that over the long-term, cree will become a major player in the lighting business. i don't think we should be too worried about phillips. i don't think phillips is going to muscle cree out of the light game. this kind of thing is not new. it's been going on for years. cree's in the cheap. selling for 3 times next year's earnings with a 16.5% long-term growth rate. and i do not no like to recommend anything on this show that else at more than two times its growth rate. even google, i said at the top of the show. i like this company, but at these levels, no, only for a pullback. for once, i hope the bears will be right and cree will get hit the next couple of times it reports and that will give you some significant buying opportunities. when two analysts directly
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contradict each other, you need to go with the side that's more rigorous. stern ag says their channel checks were worse, but lazard only checked with home zpoe. and while home depot is certainly important, stern ag cast a much wider net that we need to make the best judgment and the best judgment is a decree against cree. i can't recommend cree at these levels, but if we get a pullback, i think cree would, indeed, be an excellent buy. sally in illinois. sally! >> caller: jim, you're the best of the best on cnbc, let me tell you. >> thank you. >> caller: my question is, what is going on with ge? is it time to get rid of jeff immelt and bring back another jack welch? he's not doing good at all for ge and it's been a long time. i don't understand. the last shares that i bought were in '08 and they were $24.39 in december of '08.
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what is he doing? >> well, first, you know, look, do i know him, as a business planner, he's working as hard as he can. i think there's a lot of businesses that are just doing okay. the last quarter wasn't that good. that said, i put my money where my charity's mouth is. my charitable trust owns ge, have faith in the longer term, but you're right, it's been disappointing. i don't know how else to put it. it's been a disappointing stock, but i believe the prospects are improving as the dividend increases and the business comes together. let rigor be your guiding light. analysts at cre rare saying thae is worrisome. i actually like cree on a pullback. don't move. the "lightning round" is next! [ musick ] i knew there were a lot of tech jobs
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it is time, it is time for the "lightning round" on cramer's "mad money." hey, what's that about? rapid-fire calls, where i tell you whether to buy, buy, buy or sell, sell, sell. i don't know the calls or callers ahead of time. when you hear this sound, then
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the "lightning round" is over. are you ready, skee-daddy! it is time for the "lightning round" on cramer's "mad money." i'm going to start with mario in georgia. mario? >> caller: cramer, love the show? first-time caller, long-time listener, baby. >> thank you. >> caller: my stock is pbl, biopharma. >> it's a spec, but i do like this one. i've been looking at it. let's go to richard in texas. richard! >> caller: yes? >> hey, rich. >> caller: hey, a big texas boo-yah. >> i like that one. >> caller: what is your opinion of ford common stock, what is your opinion? >> i think europe is bottoming. i think ford is a buy. don't just quote me, because cisco, john chambers, has one ear in that and he says europe's bottoming and that's fabulous for letter "f." jerry in illinois. >> caller: boo-yah, jim, from
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jerry in river grove. first-time buyer in 25 years, i need your opinion on my first purchase, berkshire hathaway. >> jerry, you've got horse sense. i don't know a better way to start the first buy than buying warren buffett's company. let's go to jack in ohio. jack? >> caller: jim. >> jack. >> caller: i'm in it for the long-term with the monthly dividend payment, arr. >> man, that one's too hard. i don't like the mortgage reits, because i don't know what the fed's going to do with interest rates and neither does anybody else, that's why it keeps going down, and i'm suspending judgment on that particular kind of real estate investment until we have early clarity from the fed. let's go to patricia in hawaii. patricia? >> caller: hey, cramer, how you doing? >> i'm doing fine. how about you? >> caller: i'm good, thanks. a warm aloe hha to you. what should we do with sky works? >> tech is going to make a comeback here. i'm going back and forth with my
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co-manager at my charitable trust, actionalertsplus.com. let's go to brian in new york. >> caller: jim, welcome. boo-yah, cramer. >> yeah. >> caller: how you doing? >> not bad. how about you. >> caller: i'm good, i'm good. i've got some house money i'm playing with, with this stock, travel america, ta. >> we like that. we just had that on the other day. it was the answer to an e-mail query. i think you've got a good one there. and that, ladies and gentlemen, is the conclusion of the "lightning round"! the "lightning round" is sponsored by td ameritrade. coming up, shipwreck? it's been a volatile voyage for shares of nordic american tanker. tonight, cramer checks in with a company's captain to find out if he can right the ship and shore up the stock. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ]
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american tanker, single nat, the third largest and best run oil tanker in an industry that's been a total house of pain for years. demand for tankers has been under pressure, thanks to the relative sluggish chinese economy, as well as the newfound oil we found here in the united states. on the other hand, nordic american tankers reported two days ago, and while they posted a larger than expected loss, the rates for the tankers came in at $12,500, about $500 above the company's break-even level. management maintained the quarterly dividend at 16 cents a share, after nearly cutting it in half back in january. these levels not as paying for you to wait for a return in the global economy that would revitalize the tanker business with a 7.2% yield. however, with the stock up $8.91, that's less than a on the above its 52-week low, it's clear that waiting has not been a good strategy here. we may be at a moment where
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nordic american simply can't go much lower, and if economies really start to, then the stock could go a lot higher. that said, it has been a terrible bet to think that way. so let's check in with herb jor hanson. he's the founder, chairman, and ceo of nordic american tankers. mr. hanson, welcome back to "mad money." >> thank you, jim, for having me and inviting me. >> we're always going to invite you, because you're always very forthcoming. i go on twitter and ask people what people think about nat, and what they want to know, and they want to know why do you keep buying ships in a declining virpt? >> we can buy these ships now for about half the price compared with the situation four or fife years ago. and it's much better to buy it cheaply than expensively. we did buy a ship just a month
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or so ago at $45.7 million. the shame ship was bought and sold four years ago or five years ago at $110 million. so we run a very conservative business and we do this very thoughtfully. and it is better to why a ship when the price is down than when the price is up. and this market will come back. i'm certain about that, jim. >> well, it would have been -- when apple was at $700, it was better to buy it at $600, until it went to $400. how do we know you're not buying ships at $600? >> well, you are never assured that you reach the bottom. but we must combine this with our risk management model. we are very conservative. we have seen many companies
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going to the wall, going into chapter 11, but we have the strongest balance sheet in the industry. but what we do see now are some hopes on the horizon. which these hopes are emerging, quite clearly, in my judgment. >> so what are the hopes? because as i mentioned in my introduction, we are discovering a lot of oil in this country, we don't need your tankers as much as we did, and we know that china, all the data points are pretty negative. >> well, i tend to take a different view. because in the past, you were importing oil from venezuela, from angola, from nigeria. and these guys in these countries have to sell the oil elsewhere, and you are correct in saying that the u.s. imports are down, that exports from these three countries going, in
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particular, to the far east, also to china. china does not show a very, very strong growth. but when we transport the oil from venezuela to the far east, from nigeria to the far east, and from angola to the far east, it creates more transportation work. analysts tell us that volume of transportation last year expressed in terms of ton mile, that is the distance multiplied by the volume, that increased by 5% to 10% last year. the decrease has been more than outweighed by the increase in out parts of the world. >> then why aren't rates going up? why isn't your stock going up? i don't want to be rude, i'm thrilled that you're here, but
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that scenario you jouust traced out would mean that the stock should be at $18, not $8. >> but it may come back. it's always darkest before dawn. >> that's real dark for a long time. >> i'm the biggest shareholder of the company and i'm very relaxed on this. and i've invested millions of dollars of my private money, so i really put my money where the mouth is and if i can be a little bit technical, when there are a few ships too many, the rates go down. when there are a few ships too few, rates go up. in the short-term, there is what we economists call inelastic supply. therefore, this may change very quickly and very unexpectedly. i have been in this business long time, during which also the market was down for many years. but now, in the globalized
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world, there is free trade. and i shall not be too technical. but we transport oil from the west to the east and from the east to the west. and the emergence of oil traders have created a completely new situation. and you know, if we have continued or improved business cycle, we should be fine. i'm confident about this. >> is there any dimuation of ships being built. one day we would get a shortage of new ships versus ships that have to be scrapped. >> our business is a function of supply and demand. our and our ships are 1 million balanced ship, they're diversified, and next year we expect the total fleet to go down. you know? ordering up new service maxes at
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the shipyard has essentially come to a standstill. point number two, we see increased scrapping. not so much in the fourth quarter of this year, but we expect definitely increased scrapping to take place, this has to do with the steel price, because the ships are recycled. so we are no question, coming closer to the point when supply and demand can be expected to converge and then we will be in excellent shape, having 21 ships ready to reap the economic benefits of this that we see on the horizon. >> there's no doubt, sir, you're absolutely right. the moment it snaps back, you will be the one in position. but you have to respect the fact that the shareholders come to me. and you say, when is that moment? because in the interim, i'm really getting hurt.
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>> well, i'm getting hurt too. i don't like a low stock price. shareholders complain when the stock is down and when the stock is up, they don't complain. but they fully understand them. i agree with the shareholders. you know, i work for the shareholders. we have ten s and tens of thousands. and they should, indeed, talk to you, and you must give them consolation. >> look, you're very fair. i keep -- i know hope shouldn't be part of the equation. there's no doubt about it, you are the most disciplined guy, the best guy in the industry, but the industry is such a tough industry that you have to understand the frustration that people are venting to me, because they just say, how can it be so bad for so long. >> well, that is the type of this industry. some people don't understand, many ship owners, they don't understand the notion of risk management. if you as a person, as a company, or as a country borrow
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too much money, you simply go to the wall in the end. and we are very, very conservative. and i will never, never put this company on the line. that will never happen. my chairmanship, which i expect will last for a good many years to come. >> well, thank you, sir. thank you for coming on and thank you for explaining it to us. and it is, indeed, true that we get a turn and nat goes much higher. but we need the turn. thank, sir. >> thank you, jim. >> he's the founder, chairman, and ceo of nordic american tanker. and look, if you believe in a turn, this is the one. but if you're tired, who can blame you. stay with cramer. still ahead, you plan, you play, you try to perfect, but can your strategy stand up to cramer's test? call, e-mail, or tweet @jimcramer to find out if your portfolio has what it takes in "am i diversified?"
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dow closed at another record high today. but even in a strong market like this, i know 18 straight up tuesdays and that stuff, i can only think of one thing that can help you stay protected in case things get sour, and that's
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diversi diversification. that way you aren't putting all your eggs in one basket. you know i like hot stocks, but i have to like everything. you call me or tweet me @jimcramer, tell me your top five holdings and i tell you if you're diversified enough, maybe need to mix it up a little. i know the market's great, it isn't always going to be great. let's start with a tweet. the tweet is from @usaf_vet, which i presume you are, and i thank you for serving, and he asks, or she asks, am i diversified, dnkn, verizon, vz, waste management, key, and peg, public services enterprise group. thanks for the books, the shows, tweets and being a gentleman in studio for the veteran's day show. thank you so much, sir. makes me feel great. let's take a look at this portfolio. dunkin is the, this is a very
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interesting portfolio, in part, full disclosure, there's a lot of actionalertsplus.com, a lot of charitable trust names. dunkin brands, we're showing that, a fantastic chain, like that very much. pse&g, that's the utility. waste management, that's the waste disposal company. key is a bank that i think is the single best bank that my charitable trust owns. i think it's going to go dramatically higher. and verizon, the phone company. a phone company, a waste company, a utility, a coffee retailer and we've got a bank and i say that is perfect! usaf_vet, good job! now let's go to ron in kentucky. ron must be lucky, he's from kentucky. ron? >> hey, jim, thanks for taking my call. one thing i've invested for you over the years, invest in long-term themes and invest in breed stocks. i have what i call a rip van winkle portfolio, one you can
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buy these five stocks tomorrow, take a 20-year nap and wake up quite wealthy. i have union pacific, i have costco, which is my ag play, because people have to eat and want to save money, ventas, vtr, chevron, cvx, and for housing, berkshire hathaway. am i diversified? >> wow. you know what, this is one of the -- sometimes when you hear a portfolio and you just want to say -- >> hallelujah! >> this is a great portfolio. union pacific is the best of the transports. it's been incredible. look, i like us airways for a spec. chevron is better than all the others in terms of performance of the majors. ventas, remember that, senior living, that's a fantastic real estate investment trust. berkshire hathaway, what needs
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to be said? and costco, best retailer in america. retail, housing, let's call this real estate investment trust, oil, and transport. wow! i mean -- >> hallelujah! >> just fantastic work. we have such smart viewers. stay with cramer. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room.
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yes, this is good. like to say there's always a bull market somewhere, i promise to try to find it just for you right here on "mad money." i'm jim cramer and i'll see you tomorrow! >> narrator: in this episode of "american greed"... >> he had millions and millions and millions and millions and more millions. >> narrator: ...matt cox and rebecca hauck... >> matt says, "i got to get out of here. i got to leave," you know, "you want to come?" >> narrator: ...the bonnie and clyde of mortgage fraud. >> his plan was to get as much as he can and go somewhere else and do it and go somewhere else and do it. >> now, at that point, i really did, i thought, "they'll never catch me."

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